REVIEW MONTH: September Rick Raemisch Executive Director

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1 ADMINISTRATIVE REGULATION REGULATION NUMBER PAGE NUMBER 1 OF 7 CHAPTER: Personnel COLORADO DEPARTMENT OF CORRECTIONS SUBJECT: State Employee Cost Savings Incentive Plan RELATED STANDARDS: ACA Standards NONE EFFECTIVE DATE: December 15, 2014 SUPERSESSION: 10/15/13 OPR: BSS REVIEW MONTH: September Rick Raemisch Executive Director I. POLICY It is the policy of the Department of Corrections (DOC) to encourage innovative thinking and the involvement of DOC employees in the development of ideas that will increase the productivity and service level of the Department, while decreasing costs. The DOC recognizes that employee incentive programs will help encourage employee engagement in making state government more efficient and effective. II. PURPOSE The purpose of this administrative regulation (AR) is to provide guidelines to implement , et seq., C.R.S., State Employees Ideas that Improve State Government Operations. This incentive program centers on rewarding innovative ideas that result in specific, identifiable cost savings to state government. III. DEFINITIONS A. Employee ID Number: The nine-digit payroll number assigned by the Department of Personnel and Administration. B. Idea Application: The standard form mandated by statute for use in submitting cost savings ideas under the State Employee Cost Savings Incentive Plan. C. Permanent State Employee: An employee who is carried on a staffing pattern in excess of six months or on an annual or seasonal basis. May be on a part time or full time work schedule. (Board Rule 1-61) D. Program Manager (Incentive Plan): For purposes of determining eligibility to participate in the State Employee Cost Savings Incentive Plan, program manager is defined as any employee at a level of GP IV and above; parole and community supervisor and above; CO IV and above; CSTS III and above; CSLTS III and above; electronic specialist III and above; nurse III, mid-level providers, and above; HP IV and above; physician I, dentist I, psychologist I and above; CM III and above; CI supervisor II and above; teacher II and above; investigator III and above; SW IV and above; accountant II and above; auditor II and above; budget analyst II and above; or other equivalent classifications. E. Projected Savings: An amount calculated by the Department of Corrections that may be realized as a direct result of an employee s Idea Application.

2 CHAPTER SUBJECT AR # Page 2 F. Savings Realized: An amount calculated by a department that was actually realized by the department as a direct result of an employee s Idea Application IV. PROCEDURES A. Eligibility 1. All permanent state employees, classified and unclassified in the state personnel system, are eligible to participate, except as follows: the executive director appointed by the governor, program manager, budget analyst, or an employee whose assignment includes responsibility for identifying efficiencies and cost reductions for the Department. 2. An employee who makes a suggestion that is implemented must be employed with the state at the time of payment in order to be eligible to receive the award. Eligibility is not affected should an employee move to another position within state government without a break in service. If the employee was eligible at the time the idea was implemented, then moves to another department before payment, the employee will still be eligible for the award. The award will be paid by the original department realizing the cost savings. An employee is not considered ineligible if he/she promoted to an ineligible classification after the suggestion was accepted for implementation, but before payment is awarded. 3. For an employee to be eligible for an award under this Plan, the employee must be identified on the Idea Application (located on DOCnet) submitted prior to implementation. Groups may submit an idea, but all members must be identified in Section 1B of the Idea Application. Other requirements for groups are outlined in IV.C.4; IV.H. 1.a; and IV.H.4.a and IV.H.4.b. B. Evaluation Criteria 1. Idea Eligibility Criteria: To be eligible, an idea must meet all of the following: a. Must be the submitter s original thought. b. Must produce cost savings that are reasonably expected to be permanent and continuing. c. Must result in specific, identifiable cost savings to the Department that can be measured over a full 12-month period. d. Must provide present method of operation, proposed method, and expected benefits. Explanations must provide clear and identifiable details. e. Must be implemented by the Department of Corrections after final approval by the executive director, or designee. 2. Idea Ineligibility Criteria: An idea is ineligible for any of the following reasons: a. It would result from obvious and progressive normal business practices, such as a foreseeable expectation that the idea would be implemented in a reasonable time frame as a result of evolving business or industry practice. An idea is ineligible if it has been previously considered by the Department or is already in practice. b. It is a solution to mandated budget cuts, such as abolishing vacant funded positions or reducing staff through layoffs.

3 CHAPTER SUBJECT AR # Page 3 c. It results in cost avoidance as the method of documenting cost savings, such as no or lowered increases in costs for staff, supplies, or equipment. d. It results in revenue enhancement as the method of documenting cost savings, such as new or increased fees for services. e. It shifts the cost from one department to another or from the department to staff or from the department to offenders. If the idea would have some fiscal impact on another department but would result in substantial savings to the state, the affected departments need to coordinate the development and implementation of the idea. Any cost savings identified would be adjusted in consideration of the adverse cost impact on the other department. f. It is vague, incomplete, or deals with generalities or opinions. Idea submissions include information regarding how the cost savings will occur, approximate dollar amounts to implement and amounts potentially saved. The method for implementing the cost savings must be specific and include all relevant information including location of the proposed cost saving measure and sizes, weights, measurements etc g. It appears to be a personal complaint or criticism. h. It recommends the enforcement of an existing law, regulation, directive, or instruction. i. It recommends or requires a study to be conducted. j. It proposes improvements to non-governmental activities. k. It offers ideas or designs for posters, slogans, contests, advertising or promotional material. l. It benefits a state contractor with no benefit to the state. m. It benefits the submitter in a personal way, other than the award. n. It violates current administrative regulations or negatively impacts any established standards (e.g., fire or building codes, public health codes, ACA standards, statutes). o. It negatively impacts public safety by creating a public safety risk if implemented. 3. Department of Corrections Criteria: Though the Department of Corrections encourages ideas from employees to help the state save money, interference with regular work duties is not allowed. Generation and research for employee ideas is expected to be done after hours and is considered off-work time. C. Submission 1. An individual or group may submit ideas. 2. Ideas must be submitted on a completed Idea Application form; one single idea per application. An internal link is provided on DOCnet for this form. It is recommended to use the DOCnet link as the form can be saved and submitted electronically via Actual Submission: a. For processing, the employee shall submit the Idea Application by clicking the submit button after finalizing the Idea Application form. A reply will be sent to the address listed on the Idea

4 CHAPTER SUBJECT AR # Page 4 Application. The date and time of the reply will be used for the date and time stamp of the electronic submission. b. If the PDF version is used from the Department of Personnel and Administration website, a hard copy of the form must be submitted to Headquarters, c/o Ideas. The date and time stamp on the submission will be the date and time it is opened by the executive director, or designee, at Headquarters. To maintain confidentiality, fax submissions are not recommended. 4. After the Idea Application has been submitted, no co-submitter names may be added or removed without written consent of all of the original co-submitters. 5. The identity of an employee who submits an Idea Application shall remain confidential and be redacted from the application until the employee has been determined to be eligible for an award. The identity of the employee may be made known to the Budget Manager, or designee, for purposes of obtaining reasonably necessary additional information related to the Idea Application. 6. Retaliation against any employee for initiating an idea or participating in this program is prohibited. 7. Issues pertaining to any submitted Idea Application are not subject to grievance, appeal, or dispute resolution, in accordance with statute. D. Evaluation Process 1. Notification to Employee: Within 15 calendar days of the submission date, the executive director, or designee, shall notify the employee, in writing, of receipt of the Idea Application and whether or not it has been automatically denied. The executive director, or designee, may automatically deny an Idea Application for the following reasons: a. The application is duplicative of another idea that was submitted. b. The application is duplicative of a recommendation contained in an audit report from the Office of the State Auditor or any privately contracted auditor or consultant, a Joint Budget Committee staff document, or any other published evaluation of Colorado state government. c. The application does not meet the evaluation criteria (see IV.B.). 2. Projected Savings Calculation: For an Idea Application that was not automatically denied, the DOC Budget Office shall make a projected savings calculation within 45 calendar days of the submission date. E. Evaluation Decision 1. The executive director, or designee, shall approve or deny the Idea Application and send a written response to the employee within 60 calendar days of the submission date. If the application is approved, the employee shall be informed of the award he/she may earn. 2. If the application is approved, the executive director, or designee, shall identify, to the extent possible, any state laws or legislation that would need to be changed. If legislation is required for implementation, the legislative liaison shall submit a request for legislation to the committee of reference. F. Record Keeping: The DOC Budget Office shall maintain copies of all idea applications that are submitted, along with the following for approved idea applications.

5 CHAPTER SUBJECT AR # Page 5 1. The Idea Application. 2. The total savings achieved in the first fiscal year or first full 12-month period after full implementation. 3. The total dollars awarded as an incentive to the employee(s) who submitted the Idea Application. 4. Any affected general appropriations act (Long Bill) line item, if applicable. 5. An evaluation of the effectiveness of the implemented idea and employee award in achieving the goals set forth in , C.R.S. (e.g., better service to taxpayers, increased productivity, decreased costs and waste, increased employee morale and enthusiasm, decreased employee turnover, improved customer service). G. Implementation Process 1. An approved Idea Application that does not require legislation for implementation shall be implemented as soon as reasonably possible, and no later than July 1 of the fiscal year following acceptance. If an approved Idea Application requires statutory change, the idea is not deemed approved until the change is introduced and passed by the General Assembly and signed by the governor. 2. Thirteen months after the idea is fully implemented ( full implementation date ), the DOC Budget Office calculates savings realized for the first 12 months of full implementation. 3. No later than 14 months after the full implementation date, the DOC Budget Office shall forward all documentation of savings realized to the state auditor for review and verification if the savings is over $10,000. If the savings is under $10,000, an internal DOC audit will be conducted. 4. The state auditor has 120 calendar days to conduct a review and verification of the savings realized calculation and submit a report with findings to the Legislative Audit Committee, which shall hold a public hearing for the purposes of a review of the report. This report shall also be submitted to the executive director, or designee, who approved the Idea Application and to members of the General Assembly who carried any legislation to implement the idea. H. Distribution of Savings Realized 1. No later than the last day of the 18th month following the full implementation date, the savings realized are distributed as follows: a. Five percent, up to $5,000, as a one-time award to the employee or group of employees who submitted the Idea Application ; b. Twenty-five percent, up to $25,000, to the Department of Corrections and, c. The remainder to the state s general fund. 2. If the savings realized are federal moneys, such moneys shall not be distributed to the employee or Department of Corrections, but shall either be used for a reallocation of moneys within the Department of Corrections or shall revert, depending on the use specified for those particular federal moneys. 3. If the savings realized are from public or private grants, gifts, awards, or donations where the use of such moneys is restricted, such moneys shall not be distributed to the employee or Department of Corrections, but shall either be used for a reallocation of moneys within the Department of Corrections or shall revert, depending on the use

6 CHAPTER SUBJECT AR # Page 6 specified for those particular restricted moneys. 4. For idea applications submitted by a group of employees, the cash award will be divided equally among the group, but shall not exceed the 5%, up to $5,000 in total. If any member of the group is ineligible for a cash award, or declines the award, his/her share will be redistributed among the remaining group members. To ensure compliance with the award ceiling, awards will be calculated by rounding down when necessary. a. For example, if a group of three employees submits an idea that results in total cost savings of $100,000 achieved in the first full 12 months of implementation, the total award amount available is 5% of $100,000 or $5,000. The $5,000 would be split three ways, so each employee would receive $1, If the total cost savings were $200,000, the total award amount available would still be $5,000, which is the maximum award for one idea. Each employee in a group is not eligible for an award up to $5,000; $5,000 is the cap whether for one or multiple award recipients. b. Using the same example, if one of the three employees is ineligible or declines the award, both of the remaining employees would receive $2, The employee award is made as a one-time lump sum payment. In no event may an award be added to an employee s base pay nor does it impact an employee s highest average salary (HAS) for retirement purposes. In no case shall an award be issued until after the idea is implemented and actual achieved cost savings are calculable and realized. 6. The actual savings distributed to the Department of Corrections shall not be used for personal services expenditures. I. Recognition: Recognition of employees and the ideas that are implemented under this employee incentive program will be recognized by presentation at the Colorado Criminal Justice Association (CCJA) Conference held annually. J. Communication: The Idea Application and information related to the award an employee may earn will be advertised in monthly electronic communications to employees (e.g., , newsletter). V. RESPONSIBILITY A. The executive director, or designee, shall receive the Idea Application and process appropriately. B. Human Resources shall determine eligibility as a permanent state employee, upon submittal and award of the Idea Application. C. Budget Office and Office of Planning and Analysis shall: 1. Prepare projected cost analysis within 45 days of submittal. 2. Implement needed budget documents to reserve expected savings for approved ideas. 3. Prepare cost analysis of realized savings analysis by end of the 14 th month after implementation and submit packet of documentation to the state auditor. D. Business Technologies shall develop and maintain tracking software. E. The DOC controller shall restrict projected savings, per state controller instructions. F. Legislative Liaison: If an approved Idea Application requires legislation to implement, the legislative liaison shall submit legislation to the committee of reference assigned to DOC.

7 CHAPTER SUBJECT AR # Page 7 G. The Public Information Officer shall ensure that information regarding the State Employee Cost Savings Incentive Plan and the Idea Application is contained in a monthly electronic communication to employees. VI. AUTHORITY CRS State Employees Ideas that Improve State Government Operations VII. HISTORY October 15, 2013 March 1, 2012 October 1, 2010 ATTACHMENTS: A. AR Form A, Administrative Regulation Implementation/Adjustments

8 ADMINISTRATIVE REGULATION IMPLEMENTATION/ADJUSTMENTS AR Form A (04/15/08) CHAPTER SUBJECT AR # EFFECTIVE Personnel State Employee Cost Savings Incentive Plan (FACILITY/WORK UNIT NAME) WILL ACCEPT AND IMPLEMENT THE PROVISIONS OF THE ABOVE ADMINISTRATIVE REGULATION: [ ] AS WRITTEN [ ] NOT APPLICABLE [ ] WITH THE FOLLOWING PROCEDURES TO ACCOMPLISH THE INTENT OF THE AR (SIGNED) Administrative Head (DATE) Attachment A Page 1 of 1